Ministry of Finance

Mihály Varga

Minister of Finance

Ministry of Finance

Budget processes in line with expectations

May 9, 2019 2:23 PM

“The state of the budget is stable and balanced thanks to the performance of the Hungarian economy and the increasing revenues being realised despite the tax cuts”, Minister of Finance Mihály Varga declared.

“A surplus of 102.9 billion forints (EUR 317.2 million) was generated in April, leading to a first quarter deficit of 39 billion forints (EUR 120.2 million), all of which is in line with the Government’s expectations”, the Minister highlighted.

“Continuously increasing employment is coupled with a dynamic increase in wages, which is tangibly contributing to an increase in domestic consumption”, Mr. Varga stressed. “During the first four months of this year, with relation to the major tax types, 249.3 billion forints more in value added tax, 55.5 billion forints more in personal income tax, 36.5 billion more in excise tax, and a total of 160.9 billion forints more from pension, health insurance and job market contributions were paid into the budget than during the similar period last year”, the Minister of Finance told the press. As he explained, this all indicates that thanks to calculable budgetary and economic processes the target deficit of 1.8% remains fulfillable, while the sovereign debt to GDP ratio could fall to below 70 percent this year.

“In addition to operating the state institution system, providing social services, and realising the payment of social and pension expenditure, the Government will continue to pay out funding for EU-financed projects in advance”, Mr. Varga said. According to the Minister, in January-April 2019 the budget was able to settle accounts with relation to 305.9 billion forints (EUR 943 million) in EU revenues, while expenditure was 489.3 billion forints (EUR 1.5bn). The budget is using domestic resources to fund, amongst others, the development projects being realised within the framework of the Modern Cities Programme, as well as major capacity-expansion and job-creating investment projects being realised by certain enterprises.

The Q1 balance of the central subsystem of public finances is comprised of the 80.7-billion-forint deficit of the central budget and the 33.1 billion forint and 8.6 billion-forint surpluses generated by separate state funds and social security funds, respectively. In light of the calculable budgetary and economic processes, the target deficit of 1.8% remains fulfillable, while the sovereign debt to GDP ratio could fall to below 70 percent this year-